What You Need to Know When Using Oberlo's Pricing Rules Feature
If you’re a Shopify store owner who uses Oberlo to source products from Aliexpress, you know that pricing the products on your store is a time-consuming process. As with any business, time is essential. Anything you can do to optimize your existing processes further is a welcome addition.
On that note, Oberlo has a feature that automates the pricing of the products that you imported from Aliexpress. You just need to layout your pricing structure along with your markup rates and just like magic, pricing your products becomes an automated process.
However, the system is not perfect, and here’s what you need to know when using Oberlo’s automatic pricing feature.
The Fixed option
One of the first options presented to you when you use Oberlo’s pricing rules feature is the fixed option when setting up your markup rates.
When you decide to use the fixed option, the product cost and markup value are summed up to determine the product’s selling price.
This is a pretty straightforward approach. You need a figure of how much you want to make for every product you sell in your store.
The Multiplier option
The second option to automate pricing is the multiplier option.
This option only multiplies the product cost with your markup rate.
Your figures should be different compared to your fixed option markup rates.
Assign cents feature
We all know that using the 99 cents price ending works.
It plays a trick on people’s minds and makes them think that they’re paying less. Thus, they end up spending more money to buy the products they like.
You can leverage this tried and tested marketing tactic in your store to help you make more sales.
Seems pretty exciting, right?
Well, hold your horses just yet for the next thing I’m about to tell you will make you think twice if you really want to use Oberlo’s automated pricing feature.
Caveat: The shipping cost is not taken into account
Yes, you read it right.
Only the product cost is considered whether you’re using the fixed or multiplier option.
This is important because your product’s selling price directly impacts your bottom line.
However, there’s still something you can do to make this work.
Here are the 3 ways you can do to negate this impact
1. Only source products that come with free shipping
Products with free shipping are great. However, this is not what happens all the time.
Only sourcing products that come with free shipping limits your options and you may miss out on finding potential winning products. These are the products you need to keep your customers happy and keep your business going.
You need to have plenty of available options. The other two ways should hopefully give you that.
2. Increase your markup rates, but stay competitive
Make sure that your pricing structure will cover the shipping costs.
You do this by increasing your markup rates.
Make sure that whatever price adjustments you make, you’re still competitive with the other e-commerce stores within your niche.
3. Set a cap for shipping costs
Another thing you can do is to set a cap for shipping costs. Do this while your store is still in the development stage.
When you’re still in the process of sourcing out the products you want to sell in your store, select the products with free or minimal shipping costs.
You can do this by setting an acceptable amount for the shipping fee.
Only consider products with shipping costs that don’t go beyond your acceptable amount.
You will be probably asking yourself that if you do that, will that limit you from outsourcing the best products on aliexpress?
The answer is no because there are lots of vendors on aliexpress that sell the same product.
Just be patient and don’t rush the process of finding outsourced or dropshipped products.
Because there are similar products sold by different vendors with cheaper shipping costs.
Conclusion
Optimizing your existing processes is key to growing your store and running your business effectively.
You just need to do your homework and test it out first before going full blast with your desired changes.
Knowing how the features work guides you on what you need to cover whenever you incorporate changes to your existing processes.
You also need to know how to mitigate the risks that come along with it. Optimization should give you more benefits than risks.
In closing, how you set your markup rates should depend on the option you want to use – fixed or multiplier.
Choose what you think works best for you. How you price your product depends on your niche and should be competitive with the market